Manila: The Department of Trade and Industry (DTI) announced that the Philippines holds a favorable position compared to other ASEAN member states and Asian countries following US President Donald Trump's executive order on reciprocal tariffs worldwide.
According to Philippines News Agency, Trump's order subjects Philippine goods entering the US market to a 17 percent tariff, which remains lower than those imposed on other ASEAN nations. Countries like Cambodia, Laos, and Vietnam face tariffs as high as 49, 48, and 46 percent, respectively. This places the Philippines in a better position, with only Singapore enjoying a lower tariff rate of 10 percent within ASEAN.
The reciprocal tariffs on other Asian economies are also higher compared to the Philippines, with China at 34 percent, Taiwan at 32 percent, India at 26 percent, South Korea at 25 percent, and Japan at 24 percent. These new tariffs are set to be enforced starting April 9, 2025, a date President Trump has termed 'liberation day.'
DTI Secretary Ma. Cristina Roque expressed cautious optimism, stating the tariffs might offer strategic opportunities to strengthen economic ties between the Philippines and the US. 'As we have expected, the Philippines is among the least hit among key exporters to the US,' she noted in a message to reporters.
However, the new tariffs mean that Philippine exports, which previously benefited from lower or zero tariffs, will now face a uniform 17 percent levy entering the US market. This could potentially increase costs for US consumers and impact revenues and employment for industries dependent on US trade.
US Trade Representative data revealed that in 2024, the US imported USD14.2 billion worth of goods from the Philippines, marking a 6.9 percent increase from 2023. In return, it exported USD9.3 billion, resulting in a USD4.9 billion trade deficit with the Philippines.
According to the DTI, the US accounted for 17 percent of Philippine exports in 2024, with electronic products comprising 53 percent of these exports. Roque noted that about 10 percent of the Philippines' total trade involves the US. Some Philippine goods, like copper ores and integrated circuits, are exempt from the tariffs.
The tariff disparity may offer the Philippines a competitive edge in the US market for products such as coconut goods, which are cheaper compared to those from countries like Thailand. Roque emphasized the importance of swift action by the DTI and other government agencies to capitalize on these developments.
Roque also highlighted the Marcos administration's commitment to upholding clear trade rules to ensure sustained growth and mutually beneficial trade with the US. She plans to engage with US counterparts to discuss enhancing market access for key Philippine exports, including automobiles and agricultural products, under a potential bilateral free trade agreement.
Philippine Ambassador to the US Jose Manuel Romualdez refrained from further comments, indicating that the government, along with key economic advisors, is still assessing the implications of these tariffs on the country's economy.
